West Dapto levy cuts leave council $400m short

New caps on developer levies will leave Wollongong City Council with a $400 million shortfall on funds needed to provide community infrastructure for West Dapto.Section 94 development contributions – collected by councils to pay for basic infrastructure such as roads, drains and parks – were capped at $20,000 per residential lot in this week’s state budget.The announcement came during the council’s public exhibition of its draft West Dapto developer contribution plan, which proposes fees of up to $41,000 for each residential lot.The council has estimated West Dapto will need $756 million worth of infrastructure during the next 50 years but the cap means the council can collect only half that amount.General manager David Farmer yesterday said the council was seeking urgent talks with the State Government.”The cap on Section 94 levies is extremely concerning and will place significant pressure on the successful development of West Dapto,” he said.”We’re seeking formal talks with the State Government to explore strategies that will allow them to satisfy the need to reduce costs of development while ensuring adequate infrastructure is provided to service new greenfield developments.”The alternatives were to scaleback West Dapto infrastructure or apply for a city-wide rate rise to fund the shortfall.Major West Dapto landholder and developer Stockland welcomed the changes.”At $41,000 per lot it would put land out of reach of people down there and would probably mean releasing fewer lots,” said Barry Mann, Stockland’s general manager of residential development for NSW.”We now will be able to produce more lots at a lower price and more people in the area will be able to afford to buy them.”Meanwhile, Shellharbour City Council is facing a different dilemma.General manager Brian Weir wasn’t worried about the size of the cap, but was concerned councils could now only charge for “essential infrastructure” specific to each new development. He said Shellharbour council had relied on developer levies to help fund city-wide infrastructure as the city grew, but that would no longer be allowed.”Our section 94 levies range from $9000 to $14,000 per lot. But we are absolutely committed to the need for a city-wide levy as well as the precinct levy,” he said.Ultimately, he said the scheme would push up rates for all residents.”This new system advantages new subdivisions at the expense of existing communities,” Mr Weir said.Local Government Association president Genia McCaffery backed councils opposed to the changes and said Camden council could be left with a funding gap of $1.3 billion over 20 years.”The Government made these changes with minimal consultation with councils, no transitional arrangements and no understanding of the magnitude of the financial impact on many councils, ratepayers and local communities,” she said.
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